Covington spent all of its $428,000 of Neighborhood Stabilization Program money this week by purchasing eight townhomes, and the city is hoping its success will prompt the state to send even more money Covington’s way.
The city finalized the contracts for eight foreclosed townhomes in the Walker’s Bend neighborhood on Tuesday afternoon for a combined price of $398,000 from First State Bank in Henry County.The NSP allows cities and counties to purchase, renovate and resell foreclosed homes and properties to qualified families. The stimulus program is designed to stabilize local housing markets and provide homeownership opportunities to middle-and-lower income families.
The Walker’s Bend neighborhood is located off Ga. Highway 81, in an area the city identified as being in need of revitalization. City Planning Director Randy Vinson said the bank foreclosed eight townhomes in October, and the city immediately stepped in to buy those. The city wanted to buy all the properties in the same area, because officials thought that would have the best effect.
The townhomes were built in 2007 but were have never purchased by homeowners and have never been lived in. Vinson said the situation was perfect, because the homes don’t require much renovation work.
The city originally thought it would only be able to purchase four to five single-family homes in a different area, because each home would cost around $20,000 to rehab. But the townhomes in Walker’s Bend are in good shape and will only require minor repairs because of vandalism.
Vinson said the bank was more inclined to sell the townhomes for a good price, about $50,000 per home, because the city was willing to purchase all eight.
"We couldn’t have tailor-made this acquisition any better. We saw this as an excellent opportunity to buy more houses that fit in perfect with our budget. The bank accepted our offer and we were able to spend all our money," Vinson said. "One of the goals of the NSP was to get this money on the ground fast, and in government terms, one year is fast."
Vinson said Covington may have been the first government entity to spend all of its money. All governments have to spend their NSP money by Dec. 31, or else the money will go back to the Georgia Department of Community Affairs and be reallocated to other governments.
"Because we were successful in using our money and doing what we told them we would do, we hope that we will get some of the money other communities couldn’t use. DCA will likely reallocate several million dollars to communities that showed they knew how to get it done," he said.
Vinson said the city will sit down with DCA officials soon to see if and how much more money Covington will receive.
Covington almost fell into the category of governments that would have had to give money back. Originally, the city was planning to purchase homes in July in Jefferson Village, off Puckett Street. But by the time the city completed the program’s complex requirements and gained final approval from the DCA, many of the original 10 foreclosures had already been purchased by investors.
Another effort to purchase a home in Sterling Lakes also fell through because of approval delay. That’s why Vinson called the Walker’s Bend find a windfall.
Now that the homes have been purchased, Habitat for Humanity, the city’s non-profit NSP partner, will begin renovating the townhomes and placing families into them.
Local Habitat President Jeremy Shearer said eight families have already been picked out and he hopes to have the families into their homes in time to celebrate Christmas.
The biggest repairs will be replacing some HVAC units and copper wiring that were stolen while the homes sat vacant. Also, doors were broken in, trim was broken and one of the houses looked like someone had fallen through the ceiling, Shearer said.
The eight families were selected by Habitat based on who had the highest need. He said any family that makes between $17,000 and $36,000 per year can be eligible for a Habitat home. The eight with the greatest need were selected and allowed to go out and pick which townhome they wanted.
Vinson said the townhomes are three bedroom, two-and-a-half bathroom units around 1,500 sq. ft. The families receive some down payment assistance and homeownership training, and sign a mortgage with Habitat.
As the monthly mortgage payments are made, Habitat will be reimbursed for its renovation work and then the city will receive the rest of the money. The money will be placed into the NSP fund, which, theoretically, means the program could continue into perpetuity.
Shearer said the project is a big help for the local Habitat chapter, which has hadn’t much money in the past.
"We are really excited about this project and being able to help that number of families at Christmas. This type of work really makes my time with Habitat worth it," he said.